Malta has been sued by the European Commission at the European Court of Justice for taxing second hand cars that were imported from other EU member states at a higher rate than used cars purchased in Malta. 

As it stands, cars that were first registered in Malta since 2009 are subjected to a higher annual tax than those registered before that date. However, the system only takes into account the car’s first date of registration in Malta, not in other EU member states. 

Therefore, cars that were registered in other EU member states before 2009 and imported to Malta after that date are subjected to a higher registration tax than cars which were registered in Malta before that date.

This system was launched in 2008 specifically to protect Matese car importers from competition by cheaper secondhand EU cars. 

However, the EC warned that this against EU law, which prohibits member states from discriminating against products imported from other member states to promote the sale of domestic items. 

In June 2021, the EC sent Malta a reasoned opinion to request them to change the law within two months. Malta’s response was deemed unsatisfactory and legal institutions commenced.